Sarcoidosis is a multisystem disease of unknown etiology characterized by the formation of noncaseating granulomas. Disease involvement can be self limited or chronic, ranging from asymptomatic to end organ failure. The disease may affect lungs, thoracic lymph nodes, skin, eyes, and other organs. Corticosteroids remain the primary sarcoidosis therapy. However, steroid treatment has multiple side effects and may fail to alter the disease course. The proinflammatory cytokine TNF-alpha may play an important role in mediating sarcoid disease activity. TNF-alpha production by activated macrophages is an important element in the cell mediated immune response leading to granuloma formation. Serum levels of TNF-alpha and soluble TNF-alpha receptors are elevated in sarcoidosis patients and correlate with disease activity. Thalidomide, an inhibitor of TNF-alpha production, has been shown to have both anti-inflammatory and immune modulating effects in a number of autoimmune diseases, including discoid lupus, aphthous ulcer formation, erythema nodosum leprosum, and others. The addition of thalidomide to antibiotic regimens has also improved morbidity and mortality in animal models of M. tuberculosis infection of the pulmonary and central nervous systems. This study will evaluate the effect of daily thalidomide administration in sarcoidosis patients over a 4 month period, using clinical and laboratory based disease activity measures. Serially recorded clinical disease activity measures include spirometry, skin photographs, erythrocyte sedimentation rates, Health Assessment Questionnaires, and joint counts. Chest x-rays and several skin biopsies will be performed at several defined time points. Laboratory based disease activity measures include plasma TNF- alpha and soluble TNF-alpha receptor, soluble interleukin 2 receptor, and intercellular cell adhesion molecule-1. Interferon gamma plasma levels will also be determined. T-lymphocytes subsets and antigen-stimulated lymphocyte proliferation will be measured. Drug safety in this patient group will be monitored by blood chemistries and cell counts, history and physical exams, and renal function assessments performed during monthly patient visits.